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Editor’s note: This article is based on a presentation given at the Repêchage 13th Annual International Congress in July 2011 in Secaucus, New Jersey.

This industry has seen change during the past few years; no doubt about it. As skin care professionals, some of you have experienced a lot of transition, while others are new to the industry. Regardless of the number of years in the field, it’s crucial to keep your finger on the pulse of industry trends and carefully scrutinize how they are shaping the way business is done.

This skin care industry had grown throughout the years, experiencing ups and downs. It also has been reinvented and, although reinvention can be tough, it can also be exhilarating. All of the professionals who have remained in this industry have had to change the way that they do business.

Evolution

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Really, it all started with the basics—so how did the industry get to where it is today? Let’s look at a brief history of its evolution. The early days of spa—Greek for Salus Per Aqua—involved “health through water.” Social bathing was practiced by Egyptians, Greeks and Romans, dating back to 500 B.C. Baths, often built near natural hot or mineral springs, had their ebb and flow. This evolved into the use of saunas and steam baths in the spa.

At the turn of the 18th century and through the 19th century, spa treatments found popularity in Europe and started spreading to other countries in scenic, relaxing locales that were singled out as good venues for the weak and sick. Spas became known throughout the world for hydrotherapy. And although it was becoming mainstream in Europe, it was slow to catch on in the United States. It gradually started making its way around to North America in the 1950s and 1960s, and eventually came to become a household word.

Obviously you are familiar with Skin Inc. magazine, but what you might not know is its history, or that it is owned by Allured Business Media, which publishes a variety of industry titles. One of these publications is Cosmetics & Toiletries (C&T) magazine, which covers information catering to cosmetic chemists. In the world of publishing, reader demographics are very important, and qualifying cards are used to keep track of this information. With C&T, the word “esthetician” kept appearing as a job title on these qualifying cards. After much investigating, it became clear that there was room in the industry for a publication for estheticians that focused on business and science. So in the fall of 1988, Skin Inc. magazine made its debut. This also was a time of growth for the industry, as spas took on the focus of serious skin care, and looked at the balance between mind and body wellness.

Fast forward to the new millennium—the year 2000—and “spa” explodes. Consumers are able to experience gold facials, the ultimate luxury, coating the face with a layer of 24-karat gold at a cost of $200 and up. They are marketed as helping revitalize the skin by accelerating cell renewal and reversing oxidation damage. Another luxury, The Geisha Facial, uses traditional and natural Japanese ingredients to soften, brighten and nourish the facial complexion, including nightingale droppings, and was made famous—and also made headlines—at Shizuka New York Day Spa.

The industry was riding high. Spas throughout the nation were enjoying this success, and many business people were jumping on the bandwagon, hanging up their spa shingles. In 2008, it became noticeable that sales were starting to decline, and the phone wasn’t ringing for bookings quite as often. The recession started to take its toll, along with the downtrending of consumer spending habits. Had some of these posh industry trends run their course?

According to the International SPA Association (ISPA), the number of spa locations grew from 5,700 in 1999 to 20,600 in 2009. However, there was a 3.2% decrease compared to 2008. In that same vein, spa visits were down 10.2% in 2009, compared to the previous year. Revenue dipped 4.3%, and the industry saw an increase in the number of part-time employees. These results were alarming to most—and eye-opening. A few decided the time was right to retire and exit the industry; some who were far from retirement simply waived the white flag. However, many smart owners sat down, studied these figures and patterns, and came up with strategies to reinvent the way business was being done.

Reinventing business

Bravo to all of the skin care professionals who have withstood this change and figured out a way to thrive. This new era of skin care facility owners and managers is a savvy group that knows all aspects of the business, from management to marketing to customer service. So what is happening in today’s industry? A major trend is a return to the basics; going back to the true purpose of skin care: health, healing and overall well-being. Today’s skin health is seen as an affordable necessity, and is no longer an extravagant luxury. Today’s clients want shorter regimens of reasonably priced products, and thanks to clever suppliers and spa owners, they are getting what they want.

Demonstrating how the skin care industry is moving forward, ISPA recently identified seven key indicators that have helped spas effectively manage change during the economic downfall. Following are examples of how spa professionals throughout the nation are effectively putting them to use.

1. Employment: Reshaping the workforce.Joe Mandato, owner of La Bella Spa in Merritt Island, Florida, has shifted his team’s focus to leadership, and is learning how team members can utilize their strengths and skills to change La Bella Spa’s clients’ lives. He is establishing concrete methods to increase his team’s leadership, his spa’s efficiency, his clients’ satisfaction and, ultimately, his bottom line. This year, he based many of his tactics on the book Strengths Based Leadership (Gallop Press, 2009) .

2. Diversity: Increased appeal to broader audiences.Timeless Spa & Salt Cave in Naperville, Illinois, opened the doors to its Himalayan salt cave in 2009. Owner Jody Buckle was inspired to take on this venture after enjoying another salt cave’s benefits—it offered something different that clients couldn’t get at every spa. The 12-foot by 26-foot cave is made up of 10,000 pounds of Himalayan salt on the walls, as well as a layer of salt on the floor. Buckle explained that Himalayan salt is often considered the highest quality of salt for its therapeutic benefits and its resilience, being as old as the Himalayan mountain range from which it is mined.

3. Environmental sustainability: Going green. Spa Gregorie’s Day Spas & Salons, with multiple locations in California, has been thinking green since its inception in 1998 and is a proud founding member of the Green Spa Network, a nonprofit organization designed to bring sustainable operating practices to the spa industry. Spa Gregorie’s has always upheld a commitment to keeping the environment healthy and some of the practices maintained include utilizing recycled paper and soy ink for all printed materials at every location; donating towels to nonprofit organizations; using unbleached paper towels for treatments; recycling all bottles, cans and products used in services; and installing low-flow showerheads and toilets, among other efforts. Owner Angela Cortright strives to embrace renewing the planet, and encourages her clients to renew wellness each and every day.

4. Value: Re-engineering menus to offer discounts and incentives without sacrificing quality.Egea Spa in Evanston, Illinois, worked hard to find creative ways to appeal to clients ... ways that didn’t involve discounting. Owner Kathy Pappas says it’s all about staying power. She was concerned about online discounting, and feels the only thing that it’s doing is eroding the average selling price by training clients to wait until a service is put on sale. Her spa offers gift-with-purchase incentives, hosts various events, and also does direct marketing and offers series sales. It also has loyalty, birthday and referral programs to entice clients with added value.

5. Results-oriented: Re-evaluating business and focusing on providing tangible results. Skin Rejuvenation Clinique in San Antonio, has been focused on skin health for more than 17 years. Owner Tina Zillmann says at first it was hard for consumers to see the concept; everyone was used to the European facial model, but once they saw the results, the word was out. In this day and age, you need to provide results to keep clients coming back.

As another example, Dawn Amador, owner of Skin Logic in San Jose, California, opened her doors in February of 2009, right in the middle of the recession. Her marketing angle is to be a provider of skin health and education. She suffered from acne for years, and was left frustrated and always looking for answers. Her researching obsession for ingredients and products to help her condition turned itself into a career. Her personal goal is for every client who walks through her doors to leave educated about how to care for and treat her skin. In addition, Skin Logic makes 60–65% in retail, and uses unconventional methods to market and promote. A successful promotion through Groupon resulted in more than 700 appointments that Amador is working on turning into regular clientele.

6. Technology: social media, e-mail blasts and websites. There is so much going on in today’s world with technology. Because of its rapidly changing nature, it’s best to break this category down.

Groupon/online discounting. Although Groupon has its pros and cons, if implemented smartly, it can really enhance a business. Meghann Lawrence of Ummelina International Day Spa in Seattle admits that weathering the economic storm hasn’t been easy, and one measure the spa has taken to stay afloat is participation in Groupon, which was managed in a very smart way by the day spa. She knew that if it wasn’t managed properly, it could negatively affect the spa’s bottom line. So, the estheticians were asked to take a 20% reduction, but made sure they wouldn’t have more than three appointments in any one given day. As a result, team members found their paychecks were immediately bigger and worked hard to turn these Groupon users into loyal, return customers.

Smartphones. Jamie Nelms, owner of Your Body’s ReTreat in Hurst, Texas, uses her smartphone for mobile booking, social media and scheduling, as well as to tweet/post last-minute appointments, specials or discounts via Twitter and Facebook. She also keeps clients in-the-know by posting photos and updates about what she’s learning and who she’s seeing while at conferences and trade shows. Nelms also uses Twitter at the trade shows to connect with other industry professionals who are also in attendance as a way to network.

Social media. Eden Spa & Boutique in Jonesboro, Arkansas, uses social media as a quick and easy way to get the message out about business, as well as to announce any specials or service promotions that are currently being offered. Facebook has increased the spa’s business tremendously, and according to the spa, a mere two minutes after it posts a new special, the phones start ringing off the hook.

7. Health and wellness education: Educate consumers on healthy lifestyles. So far, examples have just been from day spas. These next two instances are destination spas that are getting into the act, as well.

Miraval Arizona Resort & Spa in Tucson, Arizona, recently launched its Focused Stay programs, which include a personal health plan and private session with its medical director, as well as a variety of hand-selected private sessions, activities and programs to help guests meet their specific goals. The package includes four nights of accommodations, healthy food and beverages, unlimited participation in daily self-discovery programs and a resort credit that can be used toward private services or spa treatments.

Golden Door in Escondido, California, offers eight specialty weeks, including private accommodations and meals, a private program interview to customize fitness and personal services, nine spa services and a complete spa wardrobe. Topics vary each week and can include The Spirited Walker, Creative Renewal, Pilates Weeks and Writing From the Soul. The property also provides three new inner-focus and fitness classes: Chakras 101, Zumba and Cardiomax.

What consumers want

Is skin health the one thing that consumers are seeing as a necessity and also as a health benefit, but also helps them feel better about themselves? According to Coyle Hospitality Group’s April 2011 Priorities of Today’s Spa Consumers report, improving appearance grew by 3% from 2010 to 2011, which would indicate that the growing trend toward beauty commonly mentioned in trade publications is, in fact, in place in the minds of the consumers, mimicking what economists call the lipstick effect, where small indulgences are prominent in a recession. The spa industry also saw this effect after Sept. 11, 2001.

Today’s consumer wants choice, simplicity and a good, meaningful deal, which all ties into adding value. This industry has worked hard to avoid the discounting trend that so many businesses have resorted to, and has thought up creative ways to add value instead. The Coyle report concludes that word-of-mouth is still, by far, the most effective form of marketing your services, and shows that offering exclusive, consistent service and incentivizing existing clients to promote your spa to friends and family is also effective. (See Consumers Want Choice for additional effective marketing options.)

Consumers are more educated and demand results. Access to skin care information and education is more widespread and important today than ever before, thanks in part to the consumer press and the Internet. The spa of tomorrow is going to be as much an educational and wellness resource as a treatment facility; this is a trend that is not going away.

The driving force in skin care will increasingly be centered around anti-aging products that are safe, effective and offer documented results. As this industry moves forward, the growth will be in treatments and products that offer skin care solutions—not hype.

Consumer education remains key. As a good example of the desire for this education, www.spaevidence.com is a new online portal available in white label format, so it can be linked to spas’ websites to enable operators to present the evidence as part of a client engagement program. In addition, it’s been designed to be user-friendly for consumers. Its creator Susie Ellis says, “The aim is to present the evidence—good or bad—so decisions can be made in an informed way.”

Industry professionals must work to shift the consumer mindset. You realize that consumers have choices. Emphasize your education. Share your knowledge. Far too often you hear stories of consumers going to reputable department store makeup and skin care counters that claim to have the magic bullet, but provide no education to explain to the consumer how or why the product works. The professional skin care industry strives toward the shift in consumers’ perceptions of skin care products and services from an indulgence to an ongoing part of their lifestyles. And it is your job to continue to teach consumers that the best way to experience these ongoing results is through professional skin care.